Pandemic power is not about the tenacity of COVID but how utilities and consumers will interact because of the virus.
Changes could be a while. A 1918 pandemic survivor was asked when people felt comfy going to the store and movies again. He said 1922.
There is electric life – BP and AP. Before Pandemic and After Pandemic. ECC called on people who understand the electric industry – utilities, small businesses, suppliers, entrepreneurs – and asked what will change for the industry and consumers. So they could be really open, we promised not to use names. Here are what they see and what we think that can mean.
Previous patterns of energy use may be long gone. “It seems pretty certain that many employers and employees are realizing that working from home is not only possible, it is desirable, both from a quality-of-life perspective and an overhead-reduction perspective,” said one industry expert. “So one would think that means higher residential load and lower commercial load, but lower power load overall.”
I have seen “Space Available” signs in office parks. Have you? One commercial real estate expert said in a July 14 Charlotte Business Journal column that, “A protracted downturn will have significant negative effects to the region’s office market.”
Is this a trend or a temporary issue in the pandemic? It is an outward sign of many changes.
Responding to the pandemic is a top priority. “Most utilities are busy making sure they can cover all the bases during the pandemic,” said a power transmission and distribution expert. “Afterward they will be dealing with a lot of deferred maintenance which may need to be a priority depending on how fast load picks up.” [If it picks up.]
Utilities must figure out their own workforce issues. While utility employees have been social distancing short term, does it fit long term? For instance, how do people distance in a two-person utility truck bucket?
Planning in a vacuum of data is tough. “The picture of [power] load recovery will be very uncertain,” says one expert who managed the aftermath of hurricanes and tornado outbreaks. If he says it will be tough, there is merit to his words.
Companies will have to transition from short-term actions in the pandemic to long term changes in procedures. The former CEO of a multi-national engineering firm asks, “What have you learned from operating a different way – people, tools, processes – that will change how to operate longer term? You may realize that certain people or positions are missing, or unnecessary, tools are inadequate, processes are ineffective.”
How has utility work changed? One professional listed the impacts: “Workforce management and scheduling, customer contact center volume, customer disconnections, increase in customer bad debt, revenue recovery, utility spending including budget reductions, cost allocations due to unemployment and bankruptcies…”
Utilities that have mastered the ability to plan and execute will likely do better for customers. Those who are out of touch are likely to get further out of touch. Those who have managed finances poorly can face big trouble – or, their customers can.
In the end, electric service is changing because of the pandemic, so processes will change. The engineering CEO adds, “Will this experience change your thinking on the balance of cost, reliability, sustainability, and resilience? Load overall has dropped off, while residential has gone up. Many customers are going to have a hard time paying for service for some time to come. So, lower revenues to the utility. Still have to maintain a certain level of reliability, and resilience.”
That means …
Budgets for utilities were set for regular maintenance, capital projects, and customer service. That was for an industry already in a lot of change. Now there is more change.
Plans from January are ancient history now. “Revenue has fallen steeply and utilities will have to build a response plan for this, as well as dealing with collection and arrears challenges from letting that slide for months,” says our transmission contact.
Something has to give. If funds are not coming in to do ongoing maintenance and operations, what gets cut? Electric service is a foundation for how our society operates – especially a “work-from-home” economy – so for long-term how does everything get funded?
An energy entrepreneur said to us: “Sustainability is key for the future, with cheap oil and tough economic times, how do we continue the path towards zero carbon emissions?”
Reducing carbon has two big facets. One is the way a utility can make electricity that is carbon-free – nuclear, solar, hydro, wind. Another, users of energy need to conserve so energy with a carbon footprint is minimized.
The pandemic has reduced energy use and emissions overall. Less commuting and reduced manufacturing. For years manufacturers have been on a tear to reduce costs and materials, helping the environment.
Maybe this is when consumers must step up big time. Residential customers will have a heightened energy responsibility. Home now is often a workplace. “I’m sure there is a list of questions to promote residential innovation,” said an energy entrepreneur. Well-known energy saving tools are improving insulation, using efficient HVAC and appliances, moderating indoor temperatures. Newer tools are smart home devices or just plain turning off appliances.
Electric vehicles are one example of the way consumers are in the middle of sustainability needs. EVs charged with carbon-free energy help the emissions in a region. If consumers are strapped for cash and oil is cheap, there is no rush to change the current petro-powered car.
ECC has always been about consumers taking more control. Being better educated about their energy use. The pandemic makes that even more important. Consumers can’t just accept the information they are dealt. Investigate new energy saving tools and energy efficient appliances. Ask for an energy audit from your utility. Best yet, press your utility for information so you understand your options.